Federal Government Policy Issues
Discussion and information on selected policy issues concerning tax, foreign relations, energy and other significant policies. The intent is to provide data and analysis that will assist in determining the appropriateness of the policy. Any posts containing rants, personal attacks on officials or other posters or which do not concisely present a point of information will not be published.Sunday, September 10, 2006
Policy Priorities
Generally, the Federal Government actively pursues policies that have significant voter support. The typical voter will only support policies dealing with topics that they understand and are familiar with. While this may make sense poitically, policy makers are not necessarily serving their constituents in the best manner possible. In some cases, policy makers need to explain topics that there constituents are not familiar with to help their constituents adjust their priorities. What priorities are not currently being addressed by the federal Government that should be?
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Synthetic Biology
Most people are vaguely aware that scientists can tweak DNA which in some cases can be used to correct a disease causing defficiency or improve the characteristics of a plant or animal.
Synthetic biology seeks to develop the ability to create a living organism from scratch. One approach would create components that could be connected to form a completely new organism in much the same way that Lego blocks can be combined. The 9/2/2006 issue of The Economist magazine had a good overview; of the topic.
This branch of science holds great promise but, as there is not currently any regulation of the field, great risk. The Federal Government, working with the science community, should develop regulations that protect us from accidents or inappropriate use of the technology.
Most people are vaguely aware that scientists can tweak DNA which in some cases can be used to correct a disease causing defficiency or improve the characteristics of a plant or animal.
Synthetic biology seeks to develop the ability to create a living organism from scratch. One approach would create components that could be connected to form a completely new organism in much the same way that Lego blocks can be combined. The 9/2/2006 issue of The Economist magazine had a good overview; of the topic.
This branch of science holds great promise but, as there is not currently any regulation of the field, great risk. The Federal Government, working with the science community, should develop regulations that protect us from accidents or inappropriate use of the technology.
DNA to Order
I only recently became aware that there are commercial firms which will synthesize DNA to order - in some cases to orders submitted over the Internet. Only a few of these firms examine their orders for DNA sequences encoding hazardous biological materials. See a report from MIT for details. Congress has spent a good deal of time investigating the use of steroids in baseball but little or none on regulation that would prevent a malevolent scientist from ordering up a batch of weaponized anthrax.
I only recently became aware that there are commercial firms which will synthesize DNA to order - in some cases to orders submitted over the Internet. Only a few of these firms examine their orders for DNA sequences encoding hazardous biological materials. See a report from MIT for details. Congress has spent a good deal of time investigating the use of steroids in baseball but little or none on regulation that would prevent a malevolent scientist from ordering up a batch of weaponized anthrax.
NEA Asteroid
NEA is an acronym for Near Earth Asteroid which is an asteroid whose orbit brings it close to earth. The concern with NEO's is that someday, one of these may impact earth which could have devastating consequences including global devastation. Remember, it was an asteroid impact that wiped out almost all life on earth including the dinosaurs about 65 million years ago. I think that most people, when they hear a discussion of NEA's, don't take the threat seriously other than as a plot for a Sunday evening movie. We spend billions trying to detect nail clippers in an old woman's purse but there are less than 6 people on earth working on identifying NEA's and developing a strategy to protect us against them.
An asteroid named Apophis will pass within 20,000 miles of earth (the moon is about 250,000 miles from earth in 2029 and I hope that the calculations are correct. Several former astronauts and a number of scientists have been unsuccessfully lobbying the government to increase funding and resources to detect these NEA's.
NEA is an acronym for Near Earth Asteroid which is an asteroid whose orbit brings it close to earth. The concern with NEO's is that someday, one of these may impact earth which could have devastating consequences including global devastation. Remember, it was an asteroid impact that wiped out almost all life on earth including the dinosaurs about 65 million years ago. I think that most people, when they hear a discussion of NEA's, don't take the threat seriously other than as a plot for a Sunday evening movie. We spend billions trying to detect nail clippers in an old woman's purse but there are less than 6 people on earth working on identifying NEA's and developing a strategy to protect us against them.
An asteroid named Apophis will pass within 20,000 miles of earth (the moon is about 250,000 miles from earth in 2029 and I hope that the calculations are correct. Several former astronauts and a number of scientists have been unsuccessfully lobbying the government to increase funding and resources to detect these NEA's.
Oil Prices
Some analysts estimate that $30 to $40 of the current oil price is due to financial speculation. Although there are other influences that have contributed to the oil price increase including the weak US dollar, financial speculation is certainly responsible for a notable precentage of the increase in oil prices which increased 57% in 2007. In 2007, hedge funds and other speculative investors were responsible for one-third of all trades on the Intercontinental Exchange, a key market for setting oil prices, up from 0.2 per cent of trades in 2002. Analysts explaining the 57% 2007 increase in oil prices usually talk about the rapid growth in other countries such as China and frequently cite the 20% growth in fixed asset investment in China. This is misleading because the fixed asset investment increases include the sale of land and property which have significantly increased over the same period.
Most commodities have seen significant price increases over the last year and in many cases these price increases have been greater than the oil price increase. Copper prices, for instance, have increased by almost 500% over the last year.
So, what can be done? One option would be for the US to impose an excess profits tax on gains from speculating in commodities by investors who do not take delivery of and use the commodity on which the future was purchased. Airlines, trucking companies, etc. frequently purchase futures to hedge their exposure to rapid price rises. I would bet that if a 50% excess profit tax was imposed on profits from commodity futures speculation that many of these financial funds would unwind their positions and the price of the commodities would quickly drop to a price that represents the true price based on the real demand of the commodity.
Ideally, the excess profit tax would be coordinated with countries which have significant commodity futures markets. Even if this coordination did not take place, the sale of futures by US hedge funds, pension funds, index funds, etc. would cause a drop in the futures prices and commodity speculators in other countries would be forced to unwind their positions to avoid further losses.
Some analysts estimate that $30 to $40 of the current oil price is due to financial speculation. Although there are other influences that have contributed to the oil price increase including the weak US dollar, financial speculation is certainly responsible for a notable precentage of the increase in oil prices which increased 57% in 2007. In 2007, hedge funds and other speculative investors were responsible for one-third of all trades on the Intercontinental Exchange, a key market for setting oil prices, up from 0.2 per cent of trades in 2002. Analysts explaining the 57% 2007 increase in oil prices usually talk about the rapid growth in other countries such as China and frequently cite the 20% growth in fixed asset investment in China. This is misleading because the fixed asset investment increases include the sale of land and property which have significantly increased over the same period.
Most commodities have seen significant price increases over the last year and in many cases these price increases have been greater than the oil price increase. Copper prices, for instance, have increased by almost 500% over the last year.
So, what can be done? One option would be for the US to impose an excess profits tax on gains from speculating in commodities by investors who do not take delivery of and use the commodity on which the future was purchased. Airlines, trucking companies, etc. frequently purchase futures to hedge their exposure to rapid price rises. I would bet that if a 50% excess profit tax was imposed on profits from commodity futures speculation that many of these financial funds would unwind their positions and the price of the commodities would quickly drop to a price that represents the true price based on the real demand of the commodity.
Ideally, the excess profit tax would be coordinated with countries which have significant commodity futures markets. Even if this coordination did not take place, the sale of futures by US hedge funds, pension funds, index funds, etc. would cause a drop in the futures prices and commodity speculators in other countries would be forced to unwind their positions to avoid further losses.
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